Additionality You Can Count On Part III: Renewable Energy, Market Transformation, and NASCAR

12 Oct 2017

Welcome to the third in a series, Additionality You Can Count On, from Colin Murchie tackling the issue of additionality and transparent accounting for environmental claims.

Part I: Additionality, Divisibility, and a Zen Koan

Part II: RECs, Double Counting, and Additionality

Part III: Renewable Energy, Market Transformation, and NASCAR

Part IV: Summing it All Up: Environmental Claims & Additionality for Modern Times

About the Author: Colin Murchie is Senior Director of Customer Energy Services at Sol Systems
Colin helps Sol Systems’ corporate and institutional customers navigate the wholesale markets to obtain utility-scale solar resources. Additionally, he oversees solar policy analysis and initiatives.

Taking you back to the old school of solar incentive programs, the ambitious and enormously successful California Solar Initiative (CSI) was explicit in why it was doing what it did.  The term was “market transformation”.  Essentially the CSI’s objective was to work itself out of existence, by creating a supply chain and market that made solar work, even when the CSI rebates went away.

CSI was explicit that they didn’t care just about rebating your solar panel. They wanted to rebate your solar panel so that people would build new, better solar panel factories, develop better sales tools, build new smarter contracts, start to think about how better to put renewables on the grid, etc. etc.  It’s an outcome they evaluated very seriously, alongside the more typical metrics of greenhouse gas savings, etc.

Many corporate buyers believe the REC is enough to justify their “renewable-ness.”  They’re not wrong, if they are only thinking of the accounting angle, and it is what it is.  Others want just the long-term fixed price electricity hedge that they can only get from renewables, and if selling the REC makes that 2% cheaper, they’re game.

But ask some of the leading companies in the space “why not just buy RECs then?” and after some uncomfortable shifting, they’ll come out with something that sounds to me like a mix of that old CSI market transformation concept plus a “know your source” type of locality or identifiability concern like we see in other sustainability spheres.

What exactly is market transformation?  As happens so often in our space, NASCAR may provide the answer.

The “NASCAR Method”

Take a look at Larson’s 2016 Target car:

I would bet a giant foam “We’re #1” finger and three cans of Bud Heavy that there is no corporate conference room in which Cottonelle, Target, and Axe Body Spray agonize over which one of them truly and only put the last dollar that put that car on the track.

It does, however, look like Target cared the most about being seen to do it. That doesn’t mean they told 3M that they would be in serious trouble if they breathed a word in their marketing of their participation in the project.

Instead, racing teams explicitly disclose exactly how everyone participated – from the cash sponsors to the people handing over free telecoms management. No one person can or does claim the car wouldn’t start without them – but neither do any two people take credit for the same role.

What’s the Best Way to Take Credit?

IBM’s renewable energy claims page is probably the best example I have seen of this in our space.  Faced with a procurement goal that spans many different national and international regulatory regimes, they embrace more transparency, not less, and simply write out clearly what role they have and haven’t taken for various markets and customers.

Sometimes, limiting who takes credit for certain aspects of the project – namely the carbon reductions, or the RPS compliance – is a key component of advancing the renewables market.  Sometimes – as with project naming rights – it is just a project attribute that perhaps one offtaker cares about (and should buy) while others do not.  Sometimes, ways to attribute credit like with a project claim “nutrition label” or awesome project-specific team jackets with like different spots for the tax equity provider and the original developer, it hasn’t yet been adequately explored by the industry.

In no case, I would submit, is customer confidence or transparency better suited by less information, or by arguing about which of the many players.   The FTC Green Guides’ are a poor example here.  They condemn a customer who hosts a solar energy system for mentioning that they, e.g. host a solar energy system.  That seems very much to pursue customer protection to the point of customer misinformation.


Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.

Over the last eight years, Sol Systems has delivered 650MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit

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Colin Murchie

Colin Murchie